First of all, let me thank the Global Reporting Initiative and its chief executive Ernst LIGTERINGEN for inviting me today.

I also want to thank Teresa FOGELBERG for her active contribution to the European Commission's work on non-financial information.

Today, I want to focus on the EU proposal on non-financial, corporate reporting, published in April this year. I also want to draw your attention to the newly agreed European reporting rules for extractive industries and banks.

Europe is not here to teach other parts of the world any lessons. But I believe that our new rules can serve as a source of inspiration for other parts of the world. So I would like to congratulate the GRI to have gathered this impressive audience here today. And I would like to say a special thank you to those of you who have travelled here from outside Europe.

Let me put the issue of sustainability and corporate reporting in its wider context:

Europe is still recovering from the worst crisis in 50 years.

A crisis which has spread from the financial sector to the every-day life of many citizens and companies.

A crisis with dramatic consequences: people have lost their jobs, SMEs have lost access to funding.

And populism is on the rise across Europe.

I think we all agree that this crisis marks a turning point.

We can't afford to return to business as usual. We need to draw all – I repeat all - the right lessons from the past.

We need safer financial institutions.

Banks should return to their original task: financing the real economy.

Currently, the EU is at the forefront of this fight.

We have acted on our G20 commitments. By making banks safer and more solid.

And we are building a banking union to break the link between banks, sovereign debt and taxpayers.

However restoring the soundness of the financial sector is not enough.

More generally, we need to eliminate the short-termism that has dominated the corporate sector for too long.

If we want to cope with the ageing challenge and climate change;

if we want to step-up our innovation and higher education capacities;

if we want to build successful industries in Europe;

then we need to encourage long-term investment.

We launched a Green Paper on this issue a few weeks ago. I encourage you all to participate and communicate your ideas. I would like to promise your participation in our consultations is never a waste of time.

Finally, we need more responsible companies.

Existing corporate governance principles should be more effectively implemented.

Company boards should reflect gender, geographical, educational, professional and age diversity.

Equally, companies should meet their obligations towards employees, consumers, local communities and public authorities.

Most importantly, the way these commitments are met should be made public and transparent.

That's why non-financial reporting is such an important issue.

I am convinced this serves the interests of investors, shareholders, employees and society at large.

In parallel, this is an asset for companies themselves.

Experience shows that transparent companies have lower financing costs, attract and retain talented employees, and are more successful in the long term.

Therefore, non-financial reporting can be part of Europe’s economic recovery. And it can improve European companies' impact on the environment and societies across the globe.

But, Ladies and Gentlemen, we are not there yet. Best practices are still far from being the norm.

The existing legislation has proven to be ineffective.

At this point, not even 10% of the largest EU companies regularly disclose such information.

If we want Europe to lead the way on corporate responsibility, transparency and accountability, we have to do better.

For a long time already, I have had the conviction that we cannot keep or rebuild a sustainable economic performance without social cohesion within the companies, but also in society as a whole.

To address this issue, in 2010 we launched an extensive consultation with European countries, companies, investors and other stakeholders.

In October 2011, this process led to a renewed EU strategy for Corporate Social Responsibility1, which I presented together with my colleagues Antonio Tajani and Laszlo Andor.

Based on this preparatory work, last month, the European Commission adopted a legislative proposal enhancing business transparency on social and environmental matters.

This new proposal concerns all companies with more than 500 employees. They will have to disclose information on environmental, social and employee-related matters; Additionally, they will also have to disclose on human rights, anti-corruption and anti-bribery issues.

At the same time, listed companies will need to have a policy regarding diversity.

We ask for concise, solid, and useful information necessary to understand a company’s position.

Companies will not be required to produce a fully-fledged and detailed "sustainability" report. But naturally they are of course welcome to do so if they wish.

The proposal is now with the EU legislators, the European Parliament and the Council of ministers for adoption. I would like to take this opportunity to thank first the Irish Presidency and, secondly the European Parliament, in particular Mr Richard Howitt, Mr Raffaele Baldassaere and Mrs Sirpa Pietikainen.

I recognise a valid democratic process requires sufficient time.

However, I sincerely hope the legislation will be agreed within one year, before the 2014 European elections.

Ladies and gentlemen,

It is often the case with our proposals, that some think we are going too far, while others would like us to go even further.

It is no different for this proposal.

Now, let me address these two opposing concerns.

I – First, are we going too far?

Some people say we should have waited until the economic crisis was over.

I know that some of you are interested in how our proposed legislation relates to integrated reporting – this means comprehensively and coherently integrating financial, environmental, social and other information.

We are following with great interest the evolution of the integrated reporting concept, in particular, the work of the International Integrated Reporting Council.

But we need to go step by step.

That is why our proposal focuses on environmental and social disclosure. It does not require integrated reporting.

Ladies and Gentlemen,

As a final point, let me mention the new European reporting rules agreed for the extractive and logging industry and banks.

Companies in the extractive and logging industries will have to disclose payments made to governments on a country by country basis.

Local communities in resource-rich countries will be better informed about what their governments are being paid by multinationals for exploiting oil and gas fields, mineral deposits and forests.

The message is clear: both companies and governments can be held to account on the use of revenues from natural resources.

Under the leadership of President Barroso, Europe has taken decisive action in this field. This is similar to the rules in place in the United States.

And as of next year, European banks will have to report on the diversity of their boards and how they tackle risks.

Moreover, the largest banks will also have to disclose their profits, taxes and subsidies in each Member State and non-EU country where they operate. And in the line with yesterday's conclusion of the European Council we will expand these reporting obligations to large companies and groups.

To conclude, I would say Europe's non-financial reporting policy is both bold and balanced.

The proposal we adopted in April is a major step to promote transparency as well as social and environmental responsibility.

And I believe the new reporting requirements on banks and extractive and logging industries, already agreed in the EU, will set a benchmark for other jurisdictions in the world.

But at the same time, we will continue to pay attention to not overburdening companies – in particular small and medium businesses – with unreasonable requirements.

This is how we will make good practice the norm.

And this is how non-financial reporting will actively contribute to the new, more responsible corporate world we need to build together.